Official Audit Report Issued July 14, 2016

Office of Medicaid (MassHealth)Review of Paid

Claims within MassHealths Adult Foster Care and
Group Adult Foster Care Programs
For the period January 1, 2010 through June 30, 2015

State House Room 230 Boston, MA 02133 auditor@sao.state.ma.us www.mass.gov/auditor

July 14, 2016

Ms. Marylou Sudders, Secretary

Executive Office of Health and Human Services (EOHHS)
One Ashburton Place, 11th Floor
Boston, MA 02108
Dear Secretary Sudders:
I am pleased to provide this performance audit of the Office of Medicaids (MassHealths) review of paid
claims within its adult foster care and group adult foster care programs. This report details the audit
objectives, scope, methodology, finding, and recommendations for the audit period, January 1, 2010
through June 30, 2015. My audit staff discussed the contents of this report with management of the
agency, whose comments are reflected in this report.
I would also like to express my appreciation to MassHealth for the cooperation and assistance provided
to my staff during the audit.
Sincerely,

Suzanne M. Bump
Auditor of the Commonwealth
cc: Daniel Tsai, Assistant Secretary and Director, MassHealth
Alda Rego, Assistant Secretary, EOHHS, Administration and Finance
Teresa Reynolds, Executive Assistant to Secretary Sudders
Joan Senatore, Office of Medicaid, Compliance and Program Integrity

Audit No. 2016-1374-3M2

Table of Contents

Office of Medicaid

TABLE OF CONTENTS

EXECUTIVE SUMMARY ........................................................................................................................................... 1

OVERVIEW OF AUDITED ENTITY ............................................................................................................................. 3
AUDIT OBJECTIVES, SCOPE, AND METHODOLOGY ................................................................................................. 5
DETAILED AUDIT FINDINGS WITH AUDITEES RESPONSE ........................................................................................ 7
1.

MassHealth improperly paid approximately $15 million for adult foster care and group adult foster care
for members in long-term-care facilities. .................................................................................................... 7

APPENDIX A ......................................................................................................................................................... 15
APPENDIX B ......................................................................................................................................................... 16

Audit No. 2016-1374-3M2

List of Abbreviations

Office of Medicaid

LIST OF ABBREVIATIONS

ADL
AFC
BSI
CMR
CMS
DPH
GAFC
IADL
LTC
MMIS
OSA

activity of daily living

adult foster care
Bureau of Special Investigations
Code of Massachusetts Regulations
Centers for Medicare and Medicaid Services
Department of Public Health
group adult foster care
instrumental activity of daily living
long-term care
Medicaid Management Information System
Office of the State Auditor

ii

Audit No. 2016-1374-3M2

Executive Summary

Office of Medicaid

EXECUTIVE SUMMARY
Under Chapter 118E of the Massachusetts General Laws, the Executive Office of Health and Human
Services is responsible for the administration of the states Medicaid program, known as MassHealth.
MassHealth provides access to healthcare services to approximately 1.9 million eligible low- and
moderate-income children, families, seniors, and people with disabilities annually. In fiscal year 2015,
MassHealth paid healthcare providers more than $13 billion, of which approximately 50%1 was funded by
the Commonwealth. Medicaid expenditures represent approximately 38% of the Commonwealths total
annual budget.
The Office of the State Auditor (OSA) has conducted an audit of paid claims for adult foster care (AFC) and
group adult foster care (GAFC) services for the period January 1, 2010 through June 30, 2015. These
programs provide assistance with activities of daily living to members who are elderly or disabled but do
not need the level of assistance provided in a long-term-care (LTC) facility. The purpose of this audit was
to determine whether MassHealth paid for AFC and GAFC services in accordance with applicable
regulations and other authoritative guidance.
The audit was initiated as the result of a referral from OSAs Bureau of Special Investigations (BSI). BSI is
charged with investigating potential fraudulent claims or wrongful receipt of payment or services from
public assistance programs. BSI conducted data analytics of AFC and GAFC claims that identified
potentially improper payments due to weaknesses in MassHealths claim-processing system.
This audit was conducted as part of OSAs ongoing independent statutory oversight of the states Medicaid
program. Several of our previously issued audit reports disclosed significant weaknesses in MassHealths
claim-processing system, which resulted in millions of dollars in unallowable and potentially fraudulent
claim payments. As with any government program, public confidence is essential to the success and
continued support of the states Medicaid program.
Based on our audit, we have concluded that MassHealth improperly paid a total of $15,201,854 for AFC
and GAFC services during the audit period.

1. During the federal governments fiscal year 2015, the Federal Medical Assistance Percentage for Massachusetts was 50%.

Audit No. 2016-1374-3M2

Executive Summary

Office of Medicaid

Below is a summary of our finding and our recommendations, with links to each page listed.
Finding 1
Page 7

MassHealth improperly paid $15,201,854 for AFC and GAFC for members in LTC facilities, i.e.,
rest homes and nursing homes.

Recommendations 1.
Page 9

MassHealth should not pay for AFC and GAFC services for members who are receiving
similar services while residing in LTC facilities.

2.

MassHealth should establish and implement system edits to detect and deny claims for
AFC and GAFC services provided to members residing in LTC facilities.

3.

MassHealth should enact regulations specifically governing the GAFC program.

Audit No. 2016-1374-3M2

Overview of Audited Entity

Office of Medicaid

OVERVIEW OF AUDITED ENTITY

Under Chapter 118E of the Massachusetts General Laws, the Executive Office of Health and Human
Services is responsible for the administration of the states Medicaid program, known as MassHealth.
During the audit period, January 1, 2010 through June 30, 2015, MassHealth paid approximately $1.3
billion for adult foster care (AFC) and group adult foster care (GAFC) services for 30,408 members, as
detailed below.

Amounts Paid for AFC and GAFC Services

Calendar Year

Paid Amount

Members Served

Number of Claims

2010

$ 173,310,895

12,829

693,404

2011

201,881,956

15,178

965,490

2012

235,260,651

15,776

1,022,611

2013

258,186,291

16,851

1,295,065

2014

291,648,949

17,991

1,474,169

2015*

155,460,736

16,860

791,822

Total

$1,324,749,478

95,485

6,242,561

The audit period included only the first six months of 2015.
Of these 95,485 members, the unduplicated count is 30,408.

Medicaid
Medicaid is a joint federal-state program created by Congress in 1965 as Title XIX of the Social Security
Act. At the federal level, the Centers for Medicare and Medicaid Services (CMS), within the federal
Department of Health and Human Services, administer the Medicare program and work with state
governments to administer their Medicaid programs.
Each state administers its Medicaid program in accordance with its CMS-approved state plan. States have
considerable flexibility in designing and operating their Medicaid programs, but must comply with
applicable federal requirements established by Section 1902 of Title XIX of the Social Security Act.

AFC and GAFC Programs

The AFC and GAFC programs provide elderly or disabled MassHealth members with assistance performing
activities of daily living (ADLs) and instrumental activities of daily living (IADLs). ADLs include activities such
as eating, toileting, dressing, bathing, transferring, and walking. IADLs are activities related to

Audit No. 2016-1374-3M2

Overview of Audited Entity

Office of Medicaid

independent living that are incidental to a members care, such as household-management, laundry,
shopping, housekeeping, meal preparation and cleanup, transportation, and medication management.
Members are eligible to receive AFC or GAFC services if they require assistance or supervision with at least
one ADL. Both programs are designed to provide sufficient assistance to allow members to continue to
live independently and avoid the high cost of a long-term-care (LTC) facility.
Members who receive AFC services live in the private residence of caregivers employed by MassHealthcontracted AFC providers and receive 24-hour supervision and assistance with ADLs and IADLs. Each AFC
residence may house up to three members. AFC providers must provide nursing and case management
services for each member.
Members enrolled in the GAFC program typically live in assisted-living residences or subsidized group
housing. Members receive assistance with ADLs and IADLs from GAFC aides for one to two hours each
day. GAFC providers also employ nurses and case managers who meet with members at least once every
two months to develop and revise member-specific care plans.

LTC Facilities
LTC facilities provide a supportive and protective living environment for the elderly and people with
disabilities. The Massachusetts Department of Public Health (DPH) licenses and regulates LTC facilities.
DPH regulations require all LTC facilities to provide a baseline level of care for their residents. LTC facilities
must have written policies governing the following types of services for residents: pharmaceutical, dietary,
restorative, social, recreational, comfort, safety, and accommodations. LTC facilities must also provide a
doctor who meets with residents every one to three months, as well as sufficient nursing and supportive
care to ensure that residents receive treatments, medications, and diets as outlined in patient-specific
care plans; are comfortable, clean, and well groomed; are protected from accident and injury; receive
assistance with clothing; are bathed as desired or at least weekly; are kept dry if incontinent; receive
assistance with daily walking or movement as their conditions permit; and receive assistance with dental
hygiene in the morning and at night. LTC facilities are classified into four levels, depending on the amount
of care provided to members. For example, members who exhibit a high degree of independence and
need a low level of care reside in level IV facilities, which are referred to as rest homes.

Audit No. 2016-1374-3M2

Audit Objectives, Scope, and Methodology

Office of Medicaid

AUDIT OBJECTIVES, SCOPE, AND METHODOLOGY

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State
Auditor (OSA) has conducted a performance audit of claims paid by MassHealth for adult foster care (AFC)
and group adult foster care (GAFC) services for the period January 1, 2010 through June 30, 2015.
We conducted this performance audit in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We
believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on
our audit objectives.
Below is our audit objective, indicating the question we intended our audit to answer; the conclusion we
reached regarding the objective; and where the objective is discussed in the audit finding.
Objective
1.

Conclusion

Did MassHealth pay for AFC and GAFC services in accordance with applicable laws,
rules, and regulations?

No; see Finding 1

Methodology
To achieve our objective, we reviewed applicable state laws, rules, and regulations, as well as MassHealth
publications and guidelines. We also collaborated with our offices Bureau of Special Investigations, which
initially identified potential billing irregularities within MassHealths AFC and GAFC programs.
We requested documentation from MassHealth that included internal control plans, organization charts,
and policies and procedures for both AFC and GAFC services. MassHealth provided us with the regulations
governing the AFC program and sub-regulatory guidance for the GAFC2 program.
The audit team obtained an understanding of internal controls. AFC regulations state that MassHealth
does not pay for AFC or GAFC services provided to members residing in long-term-care (LTC) facilities. We
had planned to test controls over this restriction; however, MassHealth issued a letter (Appendix A) to
providers in 2013 stating that despite its regulations, it would pay for GAFC services for members in LTC

2. During the audit period, MassHealth had not enacted regulations governing the GAFC program.

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Audit Objectives, Scope, and Methodology

Office of Medicaid

facilities until it could enact new regulations for the GAFC program. MassHealth also informed us that it
had suspended system edits that prevented the payment of these claims for members in LTC facilities. As
a result, MassHealth did not have appropriate procedures and controls in place for us to test to ensure
that mechanisms were in place to prevent payment for these services for members in LTC facilities.
However, this did not prevent us from achieving our audit objective, because we assessed the internal
controls as high risk and included all AFC and GAFC claims in our review.
In a prior audit, OSA assessed the reliability of information stored in MassHealths Medicaid Management
Information System (MMIS), tested selected system controls, and interviewed knowledgeable agency
officials about the data. The prior audit showed that the data were sufficiently reliable.
We queried all MassHealth AFC, GAFC, and LTC claims from MMIS for the audit period. We performed
data analytics on these claims to identify (1) the frequency and cost of services performed by AFC and
GAFC providers for members in LTC facilities and (2) service trends and billing anomalies indicating
potential fraud, waste, and abuse.
Based on the claim analysis, we selected a risk-based judgmental sample of three GAFC providers and
three LTC facilities (rest homes) with which we conducted informational interviews. The purpose of these
interviews was to learn what services GAFC providers deliver to MassHealth members who live in rest
homes. We also interviewed representatives of the Massachusetts Department of Public Health to learn
what services licensed LTC facilities are required to provide to residents.
We performed additional validity and integrity tests on all claim data, including (1) testing for missing
data, (2) scanning for duplicate records, (3) testing for values outside a designated range, and (4) looking
for dates outside specific time periods. Based on the analyses conducted, we determined that the data
obtained were sufficiently reliable for the purposes of this report. Based on the evidence we gathered to
form a conclusion on our objectives, we believe that all audit work, in particular the work referred to
above, taken as a whole is relevant, valid, reliable, and sufficient and that it supports the finding and
conclusion reached in this report.

Audit No. 2016-1374-3M2

Detailed Audit Findings with Auditees Response

Office of Medicaid

DETAILED AUDIT FINDINGS WITH AUDITEES RESPONSE

1. MassHealth improperly paid approximately $15 million for adult foster care
and group adult foster care for members in long-term-care facilities.
During the audit period, MassHealth improperly paid adult foster care (AFC) and group adult foster care
(GAFC) providers $15,201,854 for 57,322 claims for services provided to members residing in long-termcare (LTC) facilities, i.e., rest homes and nursing homes.3 Of this amount, $14,331,826 (94%) was paid to
GAFC providers and $870,029 (6%) to AFC providers. These payments were for services that were
specifically identified in state licensing regulations as services already performed by LTC facilities. The
GAFC providers we spoke with said they provided personal care and assistance with hygiene, bathing,
dressing, hair care, shaving, and medication. These were the same services being provided by staff
members at the LTC facilities who are responsible for assisting members throughout the day. The AFC and
GAFC programs are designed to provide members with sufficient daily assistance to avoid placement in
LTC facilities, not to supplement services in those facilities.
Our analysis of the AFC and GAFC claims showed that more than 80% of these improper payments were
made to seven GAFC providers at 20 rest homes. A summary of the improperly paid GAFC claims is below.

Improperly Paid GAFC Claims

GAFC Provider

Rest Home

Amount Paid

Identified Claims*

Peabody Residential Services

Dalton Rest Home

$ 2,104,500

1,998

Webster Light

Crescent Manor Rest Home

692,063

640

Mill Pond Rest Home

654,314

595

Hale House

480,976

458

Tiffany II Rest Home

300,942

646

Havenwood Rest Home

266,380

258

Saint Lukes Home

233,269

291

Elizabeth Catherine Rest Home

162,893

197

Donna Kay Rest Home

1,346,175

6,193

Westbrook Heights Rest Home

437,984

2,041

Village Rest Home

432,781

2,336

3. A MassHealth member can receive limited AFC and GAFC services while temporarily receiving care in a hospital or nursing
home on a medical leave of absence or while away from home on a nonmedical leave of absence.

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Office of Medicaid

GAFC Provider

Rest Home

Citywide Home Care

Cushing Manor Rest Home

Identified Claims*

1,296,764

1,159

Burgoyne Rest Home

427,488

377

Anns Rest Home

354,140

321

Melville Rest Home

260,774

231

Senior Home Care Services

St. Julie Billiart

1,226,395

1,240

Greater Lynn Senior Services

Lynn Shore Rest Home

722,754

8,613

Atlantic Rest Home

317,034

3,763

Metrocare

Pleasant Street Rest Home

362,042

9,592

North Shore Elder Services

Brookhouse Home

197,899

176

$12,277,566

Total
*

Amount Paid

41,125

AFC and GAFC providers can submit claims either daily or monthly; this is why one provider can submit a larger number
of claims to MassHealth but receive less money than a provider with a lower number of claims.
The $1 discrepancy in this total is due to rounding.

One owner provided more than $1.3 million in GAFC and rest-home services to
the same MassHealth members.

Authoritative Guidance
MassHealth does not have regulations governing the GAFC program and relies on a set of sub-regulatory
guidelines to communicate program standards and requirements to GAFC providers. The Group Adult
Foster Care Guidelines require GAFC providers to ensure that all regulations and guidelines of
[MassHealth] for the Adult Foster Care Program are met for the GAFC program as well.
For AFC, MassHealths Adult Foster Care Manual, Section 408.437 of Title 130 of the Code of
Massachusetts Regulations (CMR), states,
The MassHealth agency does not pay an AFC provider when . . . the member is a resident or
inpatient of a hospital, nursing facility . . . , rest home, group home, . . . or any other residential
facility subject to state licensure or certification.

According to the sub-regulatory GAFC guidelines, this prohibition for AFC providers also applies to GAFC
providers.

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Office of Medicaid

Reasons for Improper Payment of AFC and GAFC Services

MassHealth did not take appropriate measures to prevent improper payment for AFC and GAFC services
provided to members in LTC facilities. MassHealth enabled this improper practice in a letter to GAFC
providers dated May 8, 2013. The letter stated that although MassHealth does not allow GAFC services
to be delivered to members living in Rest Homes, Group Homes, [or] nursing facilities, it would
nonetheless continue paying for GAFC services to members in LTC facilities. Further, a MassHealth followup email dated May 14, 2013 (Appendix B) added that the agency would also pay for GAFC services for
any new members living at these same LTCs [u]ntil new GAFC regulations are in place and clear policy
change is communicated. However, almost three years later MassHealth has still not enacted these new
regulations or implemented claim-processing system edits that would prevent payment for AFC and GAFC
services for members in LTC facilities.

Recommendations
1. MassHealth should not pay for AFC and GAFC services for members who are receiving similar services
while residing in LTC facilities.
2. MassHealth should establish and implement system edits to detect and deny claims for AFC and GAFC
services provided to members residing in LTC facilities.
3. MassHealth should enact regulations specifically governing the GAFC program.

Auditees Response
MassHealth respectfully disagrees with [OSAs] inclusion of rest homes within the audit finding of
locations where unallowable GAFC services were provided, and the corresponding audit finding
of $14,331,826. As discussed in further detail below, rest homes are not a Medicaid covered service.
While they provide protective housing environments for the elderly, they do not provide the same
level of medically necessary assistance with ADLs and IADLS, or the corresponding case
management oversight of personal care services that is provided under the GAFC program.
MassHealth does not currently prohibit members residing in rest homes from receiving MassHealth
funded medically necessary GAFC services.
We agree that up to approximately $879,000 over the audit period, or approximately $195,000 per
year, may have been paid for unallowable services. We believe that a portion of this amount is
attributable to allowable Medical Leave of Absence (MLOA) and short-term alternative placement
days. However, MassHealth did not track these payments during the audit period and therefore
cannot determine what portion of these payments may have been allowable.
Notwithstanding these concerns, we concur with the actions [OSA] recommends to prevent
payment for unallowable AFC and GAFC services when a member is residing in a LTC facility and
have already begun the process of implementing the recommendations.

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Office of Medicaid

Provided below is a response to each of [OSAs] recommendations. . . .

[OSA] Recommendation 1: "MassHealth should not pay for AFC and GAFC services when members
are receiving similar services while residing in LTC facilities."
MassHealth Response: MassHealth agrees that, with the exception of allowed MLOA Days and
Short-Term Alternative Placement Days, AFC and GAFC services are not covered when members
are receiving similar MassHealth covered services while residing in an LTC facility, such as a nursing
home, or when a member is an inpatient in an acute hospital setting. As noted in response to
Recommendation 2, below, MassHealth will be implementing system edits to track payment of
MLOA and Short Term Alternative Placement days and to deny AFC and GAFC claims that exceed
what is permitted in AFC regulations and GAFC guidelines.
MassHealth respectfully disagrees with the audit finding that GAFC services are not permitted to
be provided to members residing in rest homes. Under federal Medicaid rules, rest homes are not
considered to be LTC facilities. Federal Medicaid regulations at 42 CFR Part 483, Subpart B
Requirements for Long Term Care (LTC) Facilities, define LTC facility for purposes of the Medicaid
program, in part, as a facility that provides skilled nursing services. While rest homes are licensed
by the Massachusetts Department of Public Health under 105 CMR 150.000 Long Term Care
Facilities, because rest homes do not provide skilled nursing services rest homes are not considered
LTC facilities under federal Medicaid regulations and do not provide services covered under the
MassHealth program.
Accordingly, there are no MassHealth regulations that prohibit GAFC services from being provided
in rest homes. Sub-regulatory guidance issued by MassHealth in May of 2013 and referenced in
the Draft Report expressly clarified for GAFC providers that GAFC services are permitted to be
provided in rest homes.
While rest homes provide a basic level of care, the care provided in rest homes does not overlap
with GAFC services, which provide direct 1 to 1 assistance to members pursuant to a plan of care
derived from an assessment which is developed to meet the specific, individualized medically
necessary personal care needs of the member residing in a group setting. The plan of care must
outline other health or supportive services that the member is receiving from other agencies or
organizations to ensure what the GAFC is providing is not duplicative of what the member is
receiving from other providers.
Removing rest-home related claims from [OSAs] finding would result in a total remaining audit
finding of approximately $879,000 over the 4.5 year audit period.
With respect to AFC services, per the MassHealth AFC regulations at 130 CMR 408.419(K) and (L),
MassHealth pays for up to 40 days per calendar year for MLOA days and up to 14 "short-term
alternative placement days per member per calendar year" (during which times a member may
have a short stay in an LTC facility, such as a nursing home). MassHealth believes that a portion
of the $870,029 identified by the auditor as "improperly paid" AFC claims is attributable to allowable
MLOA and short-term alternative placement days. However, MMIS does not currently track
payment of these AFC leave days, and therefore we cannot determine what portion was in fact
allowable. As noted below in the response to [OSA] Recommendation 2, MassHealth will add a

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modifier to MMIS to track AFC claims for MLOA days and Short-Term Alternative Placement Days
and will deny AFC claims for MLOA days for a member after 40 MLOA days in a calendar year and
claims for Short-Term Alternative Placement Days for a member after 14 days in a calendar year.
[OSA] Recommendation 2: "MassHealth should establish system edits to detect and deny claims
for AFC and GAFC services provided to members residing in LTC facilities."
MassHealth Response: MassHealth agrees with this recommendation to the extent "LTC facility" is
defined as an institution providing medical services coverable under the MassHealth program, such
as a nursing facility. Specifically, MassHealth will implement system edits to detect and deny
payment for AFC and GAFC claims for MLOA days and Short-Term Alternative Placement Days that
exceed what is permitted in the AFC regulations and GAFC guidelines.
[OSA] Recommendation #3: "MassHealth should enact regulations specifically governing the GAFC
program."
MassHealth Response: MassHealth agrees with this recommendation. MassHealth is in the process
of enacting regulations to specifically govern the GAFC program.

Auditors Reply
Our conclusions are not based on the federal governments definition of an LTC facility. Rather, we
conducted our work using the criteria that MassHealth itself established for payments for AFC and GAFC
services. Specifically, as MassHealth told us, it uses sub-regulatory guidelines to communicate program
standards and requirements to GAFC providers. Section 4 of MassHealths Group Adult Foster Care
Guidelines states that providers of GAFC must follow the same requirements that apply to AFC: The
provider . . . ensures that all regulations and guidelines of the Department for the Adult Foster Care
Program are met. And the regulations for AFC, under 130 CMR 408.437, state,
The MassHealth agency does not pay an AFC provider when . . . the member is a resident or
inpatient of a . . . rest home . . . or any other residential facility subject to state licensure or
certification.

Thus MassHealths own guidelines indicate that, like the AFC program, the GAFC program cannot pay for
services for members in rest homes.
MassHealth asserts in its response that the care provided in rest homes does not overlap with GAFC
services. This is incorrect. Our audit work showed that rest-home services and GAFC services were
essentially identical and resulted in duplicative payments of more than $15 million by the Commonwealth;
this total has been adjusted to reflect any amounts attributable to allowable medical leaves of absence
and short-term alternative placement days. Specifically, during the audit, we met with three of the largest

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Office of Medicaid

GAFC providers. Each stated that its primary responsibility was to assist members with their activities of
daily living (ADLs) and/or instrumental activities of daily living (IADLs). Some of the specific tasks they
mentioned were personal hygiene, dressing, bathing and haircare, shaving, medications, skin/wound care,
laundry, and housekeeping. In addition, these GAFC providers employ nurses and social workers who are
assigned between 30 and 75 members, with each member receiving an individual care plan. These
descriptions by GAFC providers mirrored the service descriptions for rest homes, as detailed below.
To determine whether GAFC services exceeded those received in rest homes, we met with officials at
three rest homes where MassHealth members were also receiving GAFC services. We learned that the
staff at each rest home was responsible for assisting with both ADLs and IADLs 24 hours a day. The
activities included showering, grooming, laundry, bed-changing, room-cleaning, walking, assistance with
incontinence, and traveling to appointments. We determined that rest-home personnel assisted with the
same level of care that was addressed by GAFC. In fact, one rest-home employee characterized GAFC
services as giving the rest-home personnel a respite from their required responsibilities. In addition, each
rest home employs a doctor and nurse who complete a medical care plan, similar to the AFC plan of care,
for each resident and then visit periodically (every one to three months). Our observations and interviews
showed that these services, when provided by GAFC providers, overlapped with rest-home services and
resulted in duplicative payments. MassHealth regulations under 130 CMR 450.307(B)(1) forbid providers
from duplicate billing, which includes the submission of multiple claims for the same service by the same
provider or multiple providers.
Our conclusion is further supported by the Massachusetts Department of Public Health (DPH) licensing
requirements for rest homes. DPH licensing regulations require rest homes to provide the same type of
care that GAFC services provide, including the development of patient-specific care plans. Specifically, 105
CMR 150 requires that rest homes perform the following activities:

Complete a physical exam, medical evaluation, and medical care plan for each resident upon
admission. The care plan must include significant conditions, disabilities or limitations,
medications, special treatments or procedures, restorative services, dietary services, and special
requirements for the residents health or safety. See 105 CMR 150.005(F)(1).

Employ sufficient and competent staffs and ensure that residents needs are met. See 105 CMR
150.002(D)(1).

Accept only residents for whom they can provide appropriate care and services to address the
residents physical, emotional, and social needs. See 105 CMR 150.003(B).

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Have policies governing pharmaceutical services and medication, dietary services, restorative
services, social services, activities and recreation, personal comfort, safety, and accommodations.
See 105 CMR 150.004(A).

Ensure that all residents receive treatments and medications; are comfortable, clean, and well
groomed; and are protected from accident and injury. See 105 CMR 150.007(G)(1).

Provide residents with personal care routines, including bathing, linen changes, assistance with
incontinence, assistance with walking, shaving and haircuts, and recreational activities. See 105
CMR 150.007(G)(5).

In addition, MassHealth states that residents in rest homes may receive GAFC services. This is incorrect.
Guidelines by the Centers for Medicare and Medicaid Services (CMS) allow GAFC services to be provided
in homes or community-based settings, not institutional facilities such as rest homes. CMS has issued the
following guidance on the federal rules for homes and community-based settings in its Fact Sheet:
Summary of Key Provisions of the Home and Community-Based Services (HCBS) Settings Final Rule:
The final rule requires that all home and community-based settings meet certain qualifications.
These include:

The setting is integrated in and supports full access to the greater community;

Is selected by the individual from among setting options;

Ensures individual rights of privacy, dignity and respect, and freedom from coercion and
restraint;

Optimizes autonomy and independence in making life choices; and

Facilitates choice regarding services and who provides them.

The final rule also includes additional requirements for provider-owned or controlled home and
community-based residential settings. These requirements include:

The individual has a lease or other legally enforceable agreement providing similar
protections;

The individual has privacy in their unit including lockable doors, choice of roommates and
freedom to furnish or decorate the unit;

The individual controls his/her own schedule including access to food at any time;

The individual can have visitors at any time; and

The setting is physically accessible.

Rest homes cannot meet the majority of these requirements and therefore should not be considered
homes or community-based settings. The physical access and privacy requirements in particular are

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Audit No. 2016-1374-3M2

Detailed Audit Findings with Auditees Response

Office of Medicaid

impossible to meet in rest homes, since members do not have unlimited 24-hour access to the facility and
cannot lock their bedroom doors for privacy. Additionally, members do not have access to food at any
time but rather eat primarily according to menus and schedules established by facilities. In fact, 105 CMR
150.009(I)(6) specifically instructs Level IV facilitiesrest homesto restrict members access to food.
Finally, MassHealths response indicates that it does not currently prohibit members residing in rest
homes from receiving MassHealth funded medically necessary GAFC services. This practice is exactly the
problem that our report highlights and makes recommendations to resolve. MassHealths lack of
regulations prohibiting payment for GAFC services provided to rest-home residents has allowed these
duplicate payments to continue.

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Audit No. 2016-1374-3M2

Appendix A

Office of Medicaid

APPENDIX A
MassHealth Letter to Providers of
Adult Foster Care and Group Adult Foster Care

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Audit No. 2016-1374-3M2

Appendix B

Office of Medicaid

APPENDIX B
MassHealth Email to Providers of
Adult Foster Care and Group Adult Foster Care

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